Natural Gas Storage Report Withdrawal Season Week 2 (Week Ending November 10, 2017)

Despite earlier projections, Withdrawal Season didn’t take long to live up to its name. Today, the EIA reported the first net storage outflow since March of this year, totaling 18 Bcf. This was slightly greater than the market expectation of 14 Bcf, and a reversal from the previous year’s 30 Bcf build. Both last week’s lean build and this week’s draw all but confirm the colder weather models released two weeks ago. That said, despite the slightly bullish report, it wasn’t quite enough to move the needle with traders today, as recently updated weather and heating demand models continue to fluctuate, resulting in a surprising net downward trading day.

Working natural gas inventories currently stand at 3,772 Bcf. This figure is 271 Bcf (7.2%) less than this time last year and 101 Bcf (2.7%) below the five year average.

The December 2017 NYMEX Future was elevated at over $3.10/MmBTU before the report’s release, and has since depressed to under $3.06/MmBTU.

Outlook for the Balance of Storage Season:

The graph below compares historical 12, 24 and 36 month strip prices and storage levels for the past 5 years.

The following table shows the injection numbers we will need to average by week to hit selected historical levels:

The following two graphs show current natural gas in storage compared to each of the last 5 years and weekly storage averages and patterns.

The graph below shows the injections through the current week over the past 5 years.

Finally, the graphics below depicts the 6 to 10 day temperature range outlook from the National Weather Service.

Current Week’s Outlook

Future Outlook

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